Spirit Chooses Violence as It Exits Bankruptcy and Looks to Throw Hands with Southwest—Delusional?

Would ya look at that. Spirit Airlines just crawled out of bankruptcy, $795 million lighter in debt, and thinks it’s ready to take advantage of Southwest’s historic screw-up—finally charging for checked bags.

(Source: Giphy) 

In short, CEO Ted Christie woke up and chose violence as he’s already talking up Spirit like it's a real competitor, claiming Southwest’s decision will push budget travelers to look elsewhere. His logic? If Southwest is just another fee-hungry airline now, why not just go full masochist and fly Spirit? The problem: Spirit is still Spirit, my dude. 

Now to be fair, Southwest did just shoot itself in the foot. For 50 years, Southwest’s “bags fly free” policy was its golden ticket. It was the one thing keeping it separate from the rest of the nickel-and-dime airlines. Now? That’s gone. Starting in May, checked bags will cost extra, just like every other airline. Additionally, they’re rolling out basic economy, which removes seat assignments and flight change flexibility. Oh, and they’re also ditching open seating, because why not ruin everything at once? Investors to Elliott Management: “Look what you did, you little jerk”. 

 

(Source: CNBC) 

Naturally, the result is Southwest just alienated the exact travelers who stuck with them to avoid this sh*t. And now, Spirit sees an opening. “There was an audience of people who were intentionally selecting and flying Southwest because they felt that it was easy. They knew they were going to get two bags,” Christie said. “Now that that’s no longer the case, they’re going to look around.” Yeah, ok, but still, are they really looking at Spirit?

I mean seriously, in my own personal opinion, Spirit competing with Southwest is somewhat laughable. For instance, Spirit is tiny. It competes with Southwest in a handful of cities (Kansas City, Nashville, Columbus, Milwaukee). Spirit is also still a nightmare—as their entire business model is built on stripping away every comfort until you’re basically paying for oxygen. Oh, and Spirit’s reputation is straight up dog sh*t wrapped in cat sh*t (I’ve heard somebody joke about Spirit flights like they’re a Saw sequel, not a viable travel option.) 

(Source: Reddit) 

Not to mention Spirit's gut-wrenching financials. The company lost $1.2 billion last year (double its 2023 loss), and it got wrecked by a Pratt & Whitney engine recall, grounding a chunk of its fleet.

Meanwhile, Southwest still has brand loyalty, a massive route network, and a better customer experience—even after this bag fee disaster. So yeah, maybe a few desperate travelers will see Spirit’s fares pop up first on Expedia and book purely on price. But pretending this is some major competitive shift is delusional. 

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Bottom line to all of this? Spirit is still one bad quarter away from getting swallowed by another airline. Now sure, Southwest f*cked up, no doubt. But that doesn’t mean anyone with self-respect is suddenly flying Spirit. The best case for Spirit is that they might trick enough clueless travelers into booking before reality sets in. But competing with Southwest in any meaningful way? Not happening.

For now, keep your eyes on Spirit, and definitely keep your eyes on the customer experience travesty that Southwest just handed everyone. Either way, it’ll be some good entertainment if nothing else. In the meantime though, place your bets accordingly—and as always, stay safe and stay frosty, friends! Until next time… 

P.S. Robert Smalls, a big swingin’ Managing Director for StockBridge dumped $27 million in a little known aerospace company on March 10th. In less than 24 hours, we dropped a deep-dive analysis exclusively for Stocks.News premium members, breaking down the why, what it means, and how to play the aerospace sector moving forward—all while retail investors were still wiping their tears from last week's losses. Meaning, if you aren’t in the Stocks.News premium club, well, it goes without saying that you’re missing out. Don’t miss out. Click here to join ASAP… 

Stocks.News does not hold positions in companies mentioned in the article.